Fairvest Limited Class A · JSE:FTA
Fairvest Limited Class A — H1 2023 Earnings Presentation
28 slides from Fairvest Limited Class A's earnings presentation, March 2023
Slide 1: Pre-Close Presentation
PRE-CLOSE PRESENTATION For the six months ending 31 March 2023
Slide 2: Agenda
1 AGENDA • Operational update • Fairvest portfolio • Financial update • Q&A
Slide 3: Operational Update
DARREN WILDER CEO OPERATIONAL UPDATE
Slide 4: Fairvest at a Glance at 28 February
FAIRVEST AT A GLANCE AT 28 FEBRUARY Diverse portfolio Market Cap 1 131 204 m2 of R11.9bn R5.3bn of GLA (excl. Indluplace) Sectoral split by revenue Retail: 66.5% Office: 22.5% Industrial: 11.0% Sectoral split by GLA Retail: 49.8% Office: 24.8% Industrial: 25.4% Investments Gearing levels expected 61
Slide 5: Key Focus Areas
KEY FOCUS AREAS ▪ Recycle out of industrial, office and residential into retail. ▪ To maintain collectable arrears below 2% of gross income ▪ Weighted average growth on lease expiry between 2% to 6% ▪ Target a weighted average lease term remains above 36 months ▪ Determined focus on leasing of vacan
Slide 6: Fairvest: Loadshedding Management
FAIRVEST: LOADSHEDDING MANAGEMENT Hours of load shedding and diesel cost 250 200 150 100 50 0 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Diesel cost (R 'm) Hours of load shedding ▪ Total diesel cost for the period of R6.1 million. ▪ Estimated running costs of generator supply of R9.00/kWh compared to R2.50-
Slide 7: ESG: Solar Update
ESG: SOLAR UPDATE ▪ 2 new plants completed during the period with 1.4 MW capacity. ▪ 37 solar plants operating with 16.3 MW installed capacity. ▪ 11 new plants approved for installation with 6.6 MW of capacity. Cleary Park: Port Elizabeth
Slide 8: Indluplace Disposal
INDLUPLACE DISPOSAL *Fairvest owns 61.0% of the issued share capital of Indluplace Properties Limited ▪ An offer has been received from SA Corporate Real Estate for Fairvest’s entire stake in Indluplace at R3.40 per share. ▪ Expected proceeds of R651.4 million. ▪ Fairvest has concluded an irrevocabl
Slide 9: Fairvest Disposals
FAIRVEST DISPOSALS Properties transferred during the period: DISPOSAL BOOK % above GLA DATE PROPERTY SECTOR VALUE R/m² VALUE (below) YIELD (m²) TRANSFERRED (Rm) (Rm) book SARS Durban Office 230.0 23 105 9 955 220.0 4.5% 11.5% 12-Jan-23 79 Hans Van Rensburg Office 4.0 875 4 571 3.9 1.7% -9.4% 08-Mar-
Slide 10: Fairvest Portfolio
DARREN WILDER CEO FAIRVEST PORTFOLIO
Slide 11: Fairvest Portfolio Key Highlights
FAIRVEST PORTFOLIO KEY HIGHLIGHTS Tenant retention 1 131 204 m2 140 assets at 89.2% of GLA (Sep‘22 – 87.4%) Positive reversion rate Vacancy at 1.2% at 6.7% (Sep‘22 – (-6.4%)) (Sep‘22 – 5.9%) Average gross Weighted average WALE rental per m2 built in escalation 25.0 months R113.96 6.4% (Sep‘22 – 28.6
Slide 12: Regional & Sectoral Split
REGIONAL & SECTORAL SPLIT Total GLA per region Total revenue per region 50.9% Gauteng 35.8% 13.1% Western Cape 19.9% 9.5% KwaZulu-Natal 11.6% 7.9% Eastern Cape 10.1% 6.3% Limpopo 5.9% 4.8% North West 6.0% 3.6% Northern Cape 5.1% 3.0% Free State 4.4% 0.9% Mpumalanga 1.2% Total GLA per Sector Total Re
Slide 13: Fairvest Letting Activity
FAIRVEST LETTING ACTIVITY New deals Feb ’23 Sep ‘22 Mar ‘22 Fairvest Lease expiry profile by GLA Number of leases 159 404 209 300 000 22.2% Total GLA m2 41 613 76 472 35 268 250 000 17.8% 17.1% Average gross rental 16.5% 111.01 103.24 102.82 200 000 achieved (R/m2) 12.8% Weighted average 150 000 6.6
Slide 14: Office Portfolio
OFFICE PORTFOLIO
Slide 15: Office Portfolio Key Highlights
OFFICE PORTFOLIO KEY HIGHLIGHTS Tenant retention 280 563 m2 37 assets at 83.4% of GLA (Sep‘22 – 85.0%) Vacancy % of total portfolio at 15.1% GLA – 24.8% (Sep‘22 – 13.6%) Value – 21.1% Average gross Weighted average WALE rental per m2 built in escalation 20.8 months R113.57 6.2% (Sep‘22 – 25.0 months
Slide 16: Office Leasing Activity
OFFICE LEASING ACTIVITY New deals Feb ‘23 Sep ‘22 Mar ‘22 Office Lease expiry profile by GLA Number of leases 38 101 49 20.4% 60 000 Total GLA m2 20 678 17 249 7 745 50 000 15.6% 15.5% 15.1% Average gross rental 40 000 11.7% 87.78 81.36 80.53 11.3% 10.4% achieved (R/m2) 30 000 Weighted average 20 00
Slide 17: Industrial Portfolio
INDUSTRIAL PORTFOLIO
Slide 18: Industrial Portfolio Key Highlights
INDUSTRIAL PORTFOLIO KEY HIGHLIGHTS Tenant retention 26 assets 287 105 m2 26 assets at 90.9% of GLA (Sep‘22 – 88.6%) Vacancy % of total portfolio at 2.4% GLA – 25.4% (Sep‘22 – 1.0%) Value – 10.6% Average gross Weighted average WALE rental per m2 built in escalation 18.5 months R47.11 6.7% (Sep‘22 –
Slide 19: Industrial Leasing Activity
INDUSTRIAL LEASING ACTIVITY New deals Feb ‘23 Sep ‘22 Mar ‘22 Industrial Lease expiry profile by GLA Number of leases 19 56 29 34.5% 100 000 Total GLA m2 6 954 23 245 10 128 80 000 24.0% Average gross rental 60 000 15.2% 61.33 39.53 41.73 achieved (R/m2) 40 000 12.6% Weighted average 7.3% 7.2% 7.0%
Slide 20: Retail Portfolio
RETAIL PORTFOLIO
Slide 21: Retail Portfolio Key Highlights
RETAIL PORTFOLIO KEY HIGHLIGHTS Tenant retention 563 536 m2 77 assets at 91.9% of GLA (Sep‘22 – 88.0%) Vacancy % of total portfolio at 4.7% GLA – 49.8% (Sep‘22 – 4.3%) Value – 68.3% Average gross Weighted average WALE rental per m2 built in escalation 30.3 months R149.00 6.4% (Sep‘22 – 31.7 months)
Slide 22: Retail Leasing Activity
RETAIL LEASING ACTIVITY New deals Feb ‘23 Sep ‘22 Mar ‘22 Retail Lease expiry profile by GLA Number of leases 102 247 131 140 000 22.8% 20.4% 120 000 Total GLA m2 13 981 35 979 17 394 16.7% 16.1% 100 000 Average gross rental 13.0% 170.08 154.89 146.89 80 000 achieved (R/m2) 60 000 Weighted average 6
Slide 23: Financial Update
JACQUES KRIEL CFO FINANCIAL UPDATE
Slide 24: Balance Sheet Update
BALANCE SHEET UPDATE DEBT AND HEDGE MATURITY PROFILE 51% 49% 36% 19% 21% 15% 9% 0% EXPIRING IN THE NEXT 12 EXPIRING IN THE NEXT 24 EXPIRING IN THE NEXT 36 EXPIRING IN THE NEXT 48 MONTHS MONTHS MONTHS MONTHS Debt Swaps ▪ Appointed ABSA as lead arranger for debt ▪ Fixed debt component expect to exceed
Slide 25: Finance Capital Allocation
FINANCE CAPITAL ALLOCATION Fairvest embarked on a share buy back program The total shares acquired to date: ▪ During March 2023 we have repurchased 30.5 million Fairvest B-shares at an average price of R3.06 on the open market. ▪ Buy backs are income accretive. Southview Centre: Soshanguve
Slide 26: Merged Group: Share Price to Book Value
MERGED GROUP:SHARE PRICE TO BOOK VALUE -10% Price to book 12 -35% -36% -37% -44% -55% 10 8 Billions 6 4 2 - 2018 2019 2020 2021 2022 March 2023 Market price NAV Discount
Slide 27: Conclusion
CONCLUSION
Slide 28: Thank You
THANK YOU Q&A